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Value Added Tax obligation for multiple private sales through eBay

The fine line between non-commercial and commercial activities is more quickly crossed than you would think when using auction platforms.

eBay revenue subject to value added tax?

A private individual selling large quantities of items on the Internet auction platform eBay with significant revenue is acting commercially, so that the sales are subject to value added tax. Cologne Finance Court handled the case of an eBay seller generating between EUR 18,000 and EUR 66,000 annually through acquisitions and sales from a beer mat collection inherited from his father with some 320,000 individual items. The revenue office estimated that he generated 20% profit of total revenue and assessed value added tax.

Commercial vs. non-commercial activity

The Finance Court decision shows once again that auction platform sellers can be considered businesspersons even when selling private collections. This is hardly surprising in the case at issue, because the plaintiff did not sell the inherited collection “en bloc”, but rather made extensive acquisitions and sales over years. The simple fact that the goods for sale were a private collection does not mean that these were purely private sales. When not only dissolving and selling a private collection, but making multiple sales, legal advice should be sought at an early stage of whether the dividing line between non-commercial and commercial activity has been passed.

Judgment by Cologne Finance Court of March 04, 2015 – 14 K 188/13

Stefan Winheller

Attorney Stefan Winheller has specialized in tax law for about 20 years, especially in the areas of cryptocurrencies, foundations/nonprofits and international tax law.

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